Exercise 7-4A (Algo) Recognizing sales tax payable LO 7-2 The following selected transactions apply to Topeca Supply for November and Decembec. Year 2 November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month 1. Cash sales for Novembet, Year 1 were $64,500 plus sales tax of 8 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10. Year 1. 3. Cash sales for December, Year 1 were $81,500 plus sales tax of 8 percent. Required a. Show the effect of the above transactions on a statements model lake the one shown as follows. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (A), or a finanoing activity (FA) if an element is not affected by the event, leave the celi blank. b. What was the total amount of saies tax paid in Year 1 ? c. What was the total amount of sales tax collected in Year t ? d. What is the amount of the sales tax liability as of December 31 , Year 1 ? e. On which financial statement will the sales tax liability appear? Complete this question by entering your answers in the tabs below. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA), If an element is not affected by the event, leave the cell blank. (Enter any decreases to account balances and cash outfiows with a minus sign. Not all cells will require entry.) The following selected transactions apply to Topeca Supply for November and December, Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. 1. Cash sales for November, Year 1 were $64,500 plus sales tax of 8 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1 . 3. Cash sales for December, Year 1 were $81,500 plus sales tax of 8 percent. Required a. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. b. What was the total amount of sales tax paid in Year 1 ? c. What was the total amount of sales tax collected in Year 1? d. What is the amount of the sales tax liability as of December 31, Year 1? e. On which financial statement will the sales tax liability appear? Complete this question by entering your answers in the tabs below. b. What was the total amount of sales tax paid in Year 1 ? c. What was the total amount of sales tax collected in Year 1 ? d. What is the amount of the sales tax liability as of December 31 , Year 1 ? e. On which financial statement will the sales tax liability appear
